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US media reported that recently factories and product importers from Asia have revealed that they should be prepared for rising prices of finished furniture. Suppliers estimate that the price increase of finished furniture is between 4-10%, but this depends on many factors and does not necessarily represent the final situation. From raw materials, ocean freight to labor costs are rising, especially labor, furniture companies are competing with many other industries, by raising benefits and wages to allow workers to return to the furniture industry.

Some factory operators and importers believe that as costs continue to increase, price increases will begin in the near future or before the end of the year.

"Each factory will take corresponding actions based on their costs and profit margins, but in general, various costs continue to rise, if the factory did not increase the price before, now they will have to increase the price." A manufacturer Express.

These are some of the main sources of cost pressure that factories are facing or continue to face when they resume production:

1. In Malaysia and Vietnam, it is said that many factories paid workers some of their previous wages to maintain their employment relationship during the lockdown. This has caused the factory to face expenses that cannot make ends meet for several weeks or even months.

2. The factory also needs to spend money to ask medical personnel to vaccinate workers in the factory and conduct new crown tests to prevent the outbreak of an epidemic in the factory.

3. The '3 on-site' policy of on-site work, rest and meals implemented by the Vietnamese factory has forced the factory to bear the cost of providing food for workers 3 to 4 times a day. Under normal circumstances, the factory generally only provides lunch.

4. The prices of raw materials also continue to rise, from plywood, upholstery foam and packaging materials to glues, paints and chemicals that enter finishing materials.

5. The biggest factor driving price increases may be labor costs. Many factories compete for labor to an unprecedented level because they have to re-employ workers and attract workers back to their jobs so that their factories can reach near-full capacity in the near future. "The ‘bidding’ of labor prices has begun, and the company has provided huge financial subsidies to attract them to come back to work." A source said.

Vietnamese workers flocked to flee the southern industrial zone with severe COVID-19 pandemic and return to the countryside

In addition to the common problems encountered in Vietnam and Malaysia, China's mandatory power outage is also expected to have further adverse effects on the US market. Jeff Wallner, president of Global Furniture USA, said that the company has several factories in northern China that were originally operating almost 7 days a week, but now they can only operate for 3 days. This situation will affect Vietnam's production, because the parts produced in China are widely used in finished products made in Vietnam.

An importer said that cost rises have become an indisputable fact for several months. Since December last year, they have raised prices five times, and in the 10 years before the epidemic, they have had a total of about five times. Price increase.